MUHAMMADU SANI (DEFENDANT/APPELLANT)
STANDARD BANK OF NIGERIA (PLAINTIFF/RESPONDENT)
(1971) All N.L.R. 423
Division: High Court, Benue-Plateau
Date of Judgment: 26th March, 1971
Case Number: SUIT NO. JD/28/1969
Before: Bate, J.
Application for supersession of writ of execution.
(1) That the stay of execution was temporary and conditional and that when a condition was broken the stay ceased to have effect.
(2) That the effect of the default clause was that the instalment order only replaced the judgment so long as the conditions of the order were fulfilled.
(3) That upon breach of a condition the stay of execution and the instalment order ceased to have effect and the whole judgment debt and costs became due.
(4) In such circumstances s. 22 of the Sheriffs and Civil Process Law does not require the supersession of a writ of execution in respect of the whole unpaid debt and costs unless they have been paid or tendered.
Cases referred to:
Oduro v. Davies, XIV W.A.C.A. 46.
Righumal v. Allagoa, (1961) ALL N.L.R. 572.
APPLICATION FOR SUPERSESSION OF WRIT OF EXECUTION.
SUIT NO. JD/28/1969.
Ikomi for the Appellant.
Brown-Peterside for the Respondent.
Bate, S.P.J.:-The applicant has applied by motion on notice for the supersession of a writ of execution against his immovable property.
The facts are as follows. In June, 1970, the respondent bank obtained judgment in the High Court against the applicant for £5710-2s-7d and £175 costs. The applicant then applied for leave to pay his judgment debt and costs by instalments. On the 7th August, 1970, he obtained a conditional stay of execution for 12 months. The conditions were that he paid £40 within twenty four hours, and the same amount at or before the end of August and each successive month thereafter up to and including the 31st July, 1971. Payment was ordered to be made to the respondent's Counsel. The effect of this order was to give the applicant a respite for a year, provided that he paid the instalments as ordered. At the end of the year, even if the instalments have been paid regularly, the respondent bank will be free to levy execution in respect of the whole outstanding debt. But the order also makes provision for the possibility of breach of the order by failure to pay an instalment as ordered. It provides that "On failure to pay any instalment within the time stated herein this order for stay of execution will automatically cease immediately."
In October, 1970, application was made for leave for execution to issue against the applicant's immovable property in respect of the whole outstanding debt and costs. This was based on an affidavit showing among other things that the applicant had defaulted on an instalmental payment. Leave was granted.
In his affidavit in support of his application for the supersession of the writ of execution, the applicant claims that he paid the first three instalments but failed to pay the instalments due at the end of October, November and December. Then in January he paid off these three instalments in a lump sum, paid the January instalment in advance, and has paid the February instalment. He claims that on the 4th March, 1971, when he made his affidavit, he had paid all the instalments then due. But he concedes that when leave was granted for the attachment and sale of his immovable property he had defaulted on two instalments.
His application is based on the Sheriffs and Civil Process Law, s. 22(2). This provides that "If the judgment debtor, before the actual sale of the property pays or causes to be paid or tendered to the registrar of the court from which the writ issued, or to the bailiff holding the writ, the sum of money and costs inserted or endorsed as aforesaid, or such part thereof as the judgment creditor agrees to accept in full satisfaction, together with the fees inserted or endorsed as aforesaid, the execution shall be superseded, and the property of the judgment debtor shall be discharged and set at liberty." The argument is as follows. Mr Ikomi for the applicant submits that an instalment order replaces the judgment; therefore, if a judgment debtor gets into arrears with his instalments, under an instalment order; his indebtedness is limited to the amount of the instalments in respect of which he has defaulted. For this he relies on the decision of the West African Court of Appeal in Oduro v. Davis XIV WACA 46. In the present case the applicant's affidavit, which has not been challenged on this point, shows that he is now up to date with his payments under the instalment order. Therefore it is said that s. 22(2) of the Sheriffs and Civil Process Law applies and the writ of execution should be superseded.
But in Oduro v. Davis there was no provision, such as there is in the instalment order in the present case, against failure to pay an instalment as ordered. But Mr Ikomi claims that this makes no difference. He says that, in spite of the default clause, the judgment has been superseded by the instalment order and the respondent cannot claim the whole judgment debt, even though at the time when leave was given for the writ to issue he was in arrears with his instalments. For this Mr Ikomi relies on the decision of the High Court of the former Eastern Region of Nigeria in Righumal v. Allagoa 1961 ANLR 572. In that case it was held that, in spite of the fact that the instalment order included a default clause on the same lines as in the present case, execution could only be levied in respect of arrears of instalments and not in respect of the whole outstanding debt.
For the respondent Mr Brown-Peterside argues that s. 22(2) of the Sheriffs and Civil Process law does not assist the applicant because the order by virtue of its own terms ceased to operate as soon as the applicant fell into arrears with his instalments. When the order ceased to operate, the amount owing by the applicant was the whole outstanding judgment debt and costs. There is no evidence that this has been paid or tendered or that the respondent has agreed to accept any lesser sum; or, if there has been payment or tender, that it has been to the registrar or bailiff as required by the subsection. For the respondent reliance is placed on s. 21(2) of the Sheriffs and Civil Process Law. S. 21 provides "(1) Where a court has made an order for the payment of any sum of money by instalments, no writ of execution for the enforcement of the judgment shall be issued until after the default in payment of some instalment according to the order. (2) On any such default, execution or successive executions may issue for the whole of the said sum of money and costs then remaining unpaid, or for such part thereof as the court may order, either at the time of making the original order or at any subsequent time." It is said that this means that upon default in paying an instalment the court may order the whole outstanding judgment debt and costs to be paid. Mr Brown-Peterside submits that Righumal v. Allagoa was wrongly decided.
With regard to the facts, if paragraph 5 of the applicant's affidavit in support is accurate that he had paid all instalments due up and including the end of September, 1970, leave should not have been granted in October, 1970, for execution to issue against the applicant's immovable property. But the affidavit in support of the application for leave for execution to issue, which was heard by myself, shows that the applicant was at the material time in arrears with his instalments. And paragraph 10 of the applicant's application for the supersession of the writ shows that he was in arrears at the material time. I therefore reject paragraph 5 of the applicant's affidavit as inaccurate. I find that, when leave was given for execution to issue against the applicant's immovable property, the applicant was in arrears with the instalments ordered to be paid; but that by the beginning of this months, that is March, 1971, he had paid all the instalments due at that time either to the respondent bank or to the respondent's Counsel. I accept Counsel's assurance that the property has not yet been sold.
There has been a default in the payment of instalments under an instalment order, which includes a default clause, a writ of execution has issued in respect of the whole unpaid judgment debt and costs, but before the actual sale of the property attached, the judgment debtor, that is the applicant, had paid the arrears. The question is whether in such circumstances s. 22(2) of the Sheriffs and Civil Process Law requires the writ to be superseded. Assuming for the moment that there has been compliance with such requirements of the subsection as that the money, costs and fees due have been paid to the registrar or the bailiff, the main question for decision is whether the sum due is merely the arrears of instalments or whether the effect of the default clause is to make the whole outstanding judgment debt and costs due.
It appears from the West African Court of Appeal decision in Oduro v. Davis and the English decisions cited in Righumal v. Allagoa that an instalment order supersedes the original judgment; and execution cannot issue upon the original judgment but only upon the instalment order for the amount of instalments due under the order and unpaid. But with the exception of Righumal v. Allagoa, these decisions appear to be concerned with instalment orders which did not include default clauses. The effect of s. 21(1) of the Sheriffs and Civil Process Law is the same as that of these decisions. I do not think that s. 21(2) takes the matter much further. The reference to "the said sum of money and costs then remaining unpaid, or such part thereof as the court may order," must refer to the unpaid instalment with which s. 21(1) is concerned. But upon a plain and literal interpretation s. 21(2) does not mean, in the absence of a default clause, that upon default in the payment of an instalment execution may issue in respect of the whole outstanding judgment debt. The final phrase "either at the time of making the original order or at any subsequent time," refers to the time when the court orders payment of part of the sum due.
On the other hand there is nothing so far as I can see to make it improper for a court to include a default clause in an instalment order. It is a well established principle that courts will not lightly deprive a successful litigant of the fruits of his litigation. It is consistent with this principle that a court, which decides to make an instalment order but is not entirely convinced of the good faith or ability to pay of the judgment debtor, should include some provision to protect the judgment creditor. It has long been the practice in the Northern States to include such protection in the form of a default clause such as in the present case. The salutary effect of such provision is obvious. And, as Mr Brown-Peterside has pointed out, a judgment debtor who gets into arrears with an instalmental payment has his remedy under s. 23 of the Sheriffs and Civil Process Law.
The only case cited where the inclusion of a default clause in an instalment order has been held to have no effect is in Righumal v. Allagoa. With hesitation and diffidence I have come to the conclusion that that case was wrongly decided. It is based upon various decisions that an instalment order supersedes the original judgment and that execution may only issue on the instalment order and not on the original judgment. These decisions are concerned with instalment orders which do not include default clauses. But in Righumal v. Allagoa Idigbe J. concluded that this must also be the case even if a default clause is expressly inserted. With great respect I must say that in my view this conclusion is false. A default clause is included for the express purpose of protecting the creditor in case of default and removing the stay of execution which has been conditionally granted to the debtor. There is nothing improper or unlawful in the inclusion of such a clause. In the present case the stay includes two conditions; the first is that it will only last for 12 months even it the payments are made as ordered; the second is that it will cease to operate at once and before the expiry of 12 months if the applicant fails to pay an instalment as ordered. There is nothing improper in such conditions and no reason why they should not be enforced. The effect in this case is that, when the applicant defaulted in the payment of the instalment, the order by its own terms ceased to be effective and execution was no longer stayed. It is a necessary implication of the order that it only replaces the original judgment so long as the conditions of the order are observed, if they are not observed, the temporary and conditional stay of the original judgment no longer operates. It does not mean that upon a stay of execution by an instalment order with a default clause the original judgment ceases for ever to have any force for the purpose of execution. This is exactly what the default clause prevents. Consequently, when the applicant defaulted on the payment of an instalment, the stay of execution ceased to operate and the whole outstanding debt and costs became due. The subsequent payment of arrears of instalments does not revive the stay of execution; for this to happen there would have to be provision in the order and there is no such provision. Therefore s. 22(2) of the Sheriffs and Civil Process Law does not in this case require the supersession of the writ of execution.
The application is dismissed.